Abstract

The ESG movement is nudging toward an unhealthy state of political correctness, one that brooks no criticism (and there is much, but mostly sotto voce). Boards spend excessive time on ESG relative to any expected benefits for the principals; managers cynically sign up to UNPRI else their business suffers; while principals, when given a choice, eschew the option. Nonetheless, ESG raises important questions about the very purpose of fiduciary investing, especially whether a pension fund has any social responsibility beyond generating the greatest risk-adjusted return for its beneficiaries. Jane Ambachtsheer, Stephen Davis, and Keith Johnston were invited to respond to Gray’s views. Their comments follow immediately after this article.

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